The Securities and Exchange Board of India (SEBI) has proposed a change that would let foreign portfolio investors (FPIs) settle only the net value of their trades instead of settling every transaction separately. This proposal was announced in a consultation paper released by the markets regulator on Friday.
Under the current system, FPIs must settle each buy and sell order separately, even when they trade the same security on the same day. This means they have to fully fund each purchase and deliver shares for each sale, leading to higher funding requirements and increased transaction costs.
The proposed “trade netting” approach would allow investors to offset their buy and sell trades and settle only the net amount due, easing their funding burden and reducing operational costs. This change is expected to make Indian markets more attractive to large global investors and could help draw more institutional capital.
SEBI said the proposal aims to enhance operational efficiency and reduce the cost of funding for foreign investors, as outlined in the consultation paper.
This reform is part of broader efforts by SEBI to improve market accessibility and competitiveness for overseas investors, especially at a time when global capital movements are volatile and India faces competition from other emerging markets for foreign investment flows.
SEBI (Securities and Exchange Board of India) ne ek naya proposal diya hai jisme foreign portfolio investors (FPIs) ko option milega ki wo sirf net value of trades settle karein instead of har ek transaction alag se settle karne ke. Ye proposal SEBI ne apne consultation paper mein announce kiya hai.
Abhi ke system mein, FPIs ko har buy aur sell order alag se settle karna padta hai, chahe same security ko same din mein trade kiya ho. Iska matlab hai ki unhe har purchase ke liye poora fund rakhna padta hai aur har sale ke liye shares deliver karne padte hain, jisse funding requirement aur transaction costs dono zyada ho jaati hain.
Proposed “trade netting” system ke under, investors apne buy aur sell trades ko offset kar sakte hain aur sirf net amount due settle karenge. Isse unka funding burden kam hoga aur operational costs bhi reduce hongi. Ye change Indian markets ko large global investors ke liye aur attractive banayega aur zyada institutional capital attract karne mein help karega.
SEBI ne kaha ki is proposal ka goal hai operational efficiency enhance karna aur foreign investors ke liye funding cost kam karna.
Ye reform SEBI ki broader efforts ka part hai, jisme aim hai ki India ke capital markets ko overseas investors ke liye easy aur competitive banaya jaaye, especially tab jab global capital movements volatile hain aur India ko emerging markets se competition face karna pad raha hai.